(NEXSTAR) – On Thursday, Red Lobster announced its upcoming acquisition by an entity known as RL Investor Holdings LLC, after the plan was approved by a U.S. bankruptcy judge amid the restaurant chain’s financial woes.
“This is a great day for Red Lobster,” said Damola Adamolekun, who will succeed Jonathan Tibus as CEO of Red Lobster when the sale is complete. “With our new backers, we have a comprehensive and long-term investment plan — including a commitment of more than $60 million in new funding — that will help to reinvigorate the iconic brand while keeping the best of its history.”
Red Lobster had initially announced plans to file for Chapter 11 bankruptcy in May, after years of financial hurdles that included rising labor costs and all-you-can-eat promotions that backfired.
“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” Tibus said in a May 19 press release announcing the filing.
The chain has since closed well over 100 locations, including 23 that recently closed in August.
Now, after the judge’s approval Red Lobster’s sale to RL Investor Holdings (which is backed by the Fortress Investment Group), soon-to-be CEO Adamolekun is touting a “tremendous future” for the restaurant chain, which will “continue to operate as an independent company,” according to Thursday’s press release.
But what does that mean for existing and future restaurants? It’s unclear.
Red Lobster said Thursday that it expects to operate about 544 locations across the U.S. and Canada upon emerging from bankruptcy. That’s down from the 578 disclosed as of May’s bankruptcy filing, but up from the approximately 530 remaining U.S. and Canadian locations currently listed on Red Lobster’s official website.
A representative for Red Lobster was not immediately available to comment on the discrepancy, nor whether any further restaurant closures or openings were expected.
In any case, outgoing CEO Jonathan Tibus said he was “proud of what Red Lobster has achieved during this restructuring.”
“I’m incredibly grateful for the support we’ve received from our team members and diners, and from so many of our landlords and vendors throughout this process. I’m looking forward to cheering on Red Lobster as an ardent fan in the years ahead,” Tibus said in Thursday’s news release.
Known for its affordable seafood and cheddary biscuits, Red Lobster has seen multiple ownership changes over the course of its 56-year history. The brand was founded back in 1968 by Bill Darden, who sold Red Lobster to General Mills in 1970. General Mills later went on to form Darden Restaurants, which owns Olive Garden and other chains. Darden Restaurants was spun off from General Mills in 1995.
Darden Restaurants later sold Red Lobster to a private equity firm in 2014. Thai Union Group, one of the world’s largest seafood suppliers, first invested in Red Lobster in 2016 and upped its stake in 2020 — but announced its intention to exit its minority investment earlier this year.
The Associated Press contributed to this report.
